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Do banks still need branch networks?

综合2023-11-30罗兰贝格D***

AI智能总结

The report discusses the potential for banks in the GCC region to further consolidate their branch networks, with a focus on the changing paradigm of banking branches and the impact of digitalization. The report highlights that branch networks across different GCC countries have evolved in response to the changing environment, with some banks closing branches and others expanding their digital offerings. The report estimates that there is a potential for up to 41% of branch networks in the GCC region to be optimized, resulting in potential savings of up to USD 3.1 billion. The report suggests that banks can successfully harvest the branch network optimization potential by focusing on holistic optimization and leveraging digital solutions. The conclusion is that while branch networks may not be as relevant as they once were, they still have potential for increasing productivity and achieving savings across the GCC region.

REPORT Dobanksstillneedbranchnetworks? OptimizationopportunitieswithafocusontheGCCregion Keyfigures Upto 41% potentialincreaseofbranchnetworkproductivityacrosstheGCCregion 623 potentialnumberofbranchesthatcanbefurtherconsolidatedacrosstheGCCregion USD 3.1bn potentialsavingsachievablewithholisticbranchnetworkoptimizationacrosstheGCCregion 2RolandBerger|Dobanksstillneedbranchnetworks? Contents Page 4 Introduction:Thechangingparadigmofbankingbranches 5 Statusquo:BranchnetworksacrossdifferentGCCcountries 7 Recentevolution:Howbranchnetworksrespondtothechangingenvironment 15 Futureopportunities:Whatisthesizeoffurtherbranchnetworkoptimization? 18 Guidingthejourney:Howbankscansuccessfullyharvestthebranchnetworkoptimizationpotential 22 Conclusion:Arebranchnetworksstillrelevant? Cover:1221364427/iStock RolandBerger|Dobanksstillneedbranchnetworks?3 1 Introduction:Thechangingparadigmofbankingbranches Historically,thebankingsectorwascharacterizedbysignificantmarketentrybarriers.Foranewmarketentrant,apartfromregulatorylicensingrequirements,buildingscalewasmostlyamatterofcapitalavailabilityandhavingalargephysicaldistributionnetwork,whichwasalsokeytobuildingtrustandowningthecustomerrelationship. Inmorerecentyears,withdigitalizationbecomingmoreandmorepervasive,includinginthebankingsector,new“digitally-enabled”solutionshavepartiallydisruptedthehistoricaladvantageofowningthecustomerrelationshipviaexpensiveandsizeablebranchfootprints.Newentrantshavefoundinnovativewaystoattackpartsofthebankingvaluechainwithscalablesolutionsthatdonotrequiresignificantinvestmentsinphysicalassets.Fornow,thefocusofthesecompaniesismostlyonsimpleandstandardizedbankingproductsthataddressalargenumberofcustomerswithoutrequiringspecialization(e.g.,payments,investing,moneytransfers),butproductandserviceportfoliosareenrichingyearafteryear,posingincreasingchallengestotheincumbentbanks. Inaddition,therecentpandemicnotonlyboostedcustomerreadinesstoembracedigitalizationbutalsobuiltcustomerexpectationsregardingtheexpectedlevelofdigitalserviceacrossallindustries,includingbanking.Suchaccelerationofthedigitaltransitiongavefurtheradvantagetothedigitalnewentrantsandfurtherquestionedtherelevanceofthetraditionalphysicaldistributionnetworks.Banksthathistoricallyaimedtobuildextensivebranchnetworksasakeysourceofcompetitiveadvantagearenowaskednotonlytoreactbutalso,moreimportantly,tounderstandhowtoeffectivelycapitalizeonthesestructuralchangeshappeninginthebankingsector.Banksnowhaveauniqueopportunitytodeeplyre-thinkthewayinwhichtheyservetheircustomers,harvestingthebenefitsofoptimizingtheirlargebranchnetworkswhileensuringcustomers’needsareaddressedwithappropriatedigitalsolutions. Themainobjectiveofthispublicationistoassesstheimpactofthischangingenvironmentonthetraditionalparadigmofbankingbranches,withaparticularfocusontheGCCregion,answeringthefollowingkeyquestion:Arebranchnetworksstillarelevantsourceofcompetitiveadvantageforbanks? Specifically,fourmainareasareaddressedtoreachthefinalanswer: •OverviewofthecurrentbranchnetworkfootprintsacrosstheGCCregion •InsightsonhowandwhyGCCbranchnetworksevolvedinthelastfewyearsinresponsetothechangingenvironment •Estimationofthefurtheroptimizationpotentialassociatedwiththechangingenvironment •Suggestionsonhowtoensurefullcapitalizationofthebranchnetworkoptimizationpotential Statusquo:BranchnetworksacrossdifferentGCCcountries 2 TheGCCregionhasemergedasadynamiceconomichub,highlightingrapidgrowth,diversification,andmodernizationacrossvarioussectors.Apivotaldriverofthiseconomictransformationisthebankingsector,whichplaysacrucialroleinfacilitatingfinancialservices,fosteringeconomicgrowth,andshapingtheoverallfinanciallandscapeinthisregion.Bankbranches,asphysicalrepresentationsoffinancialinstitutions,constitutetheon-the-ground“arm”ofthebankingsector.Hence,itisimportanttounderstandthecurrentleveloftheirdevelopmentacrosstheregiontogaugethelevelofreachoftheend-usersand,ultimately,theirsupportofeconomicdevelopment. ByobservingthestructuralspecificitiesandrecentevolutionsofbranchnetworksineachoftheGCCcountries,itispossibletoclearlyidentifythreeclustersofcountrieswithsimilarcharacteristics: •Champions(QatarandUAE),wherebankshavealreadygonethroughafewconsolidationwavesandhaveleveragedthehighdigitalreadinessofthepopulationtoenrichtheservicemodelandcomplementoffersthroughdigitalchannels. •Challengers(KSAandBahrain),wherebranches'digitaltransformationiscurrentlyongoing,withphysicalbranchnetworksstillbeingthedominantsaleschannel,andwherethereisastrongeffortbybankstofurtherpromotecustomermigrationtowardonlinechannels. •Laggards(KuwaitandOman),wherephysicalbranchnetworksarestilloversizedcomparedtothebankingmarketsize,beingalsothedominantsaleschannel;digitalizationreadinessandcustomerpropensitytowardsalternativesaleschannelsstillneedtobeelevatedtoenableastructuredphysicalfootprintoptimization. ABranchnetworksizeandmaturityacrosstheGCCcountries Kuwait (72) 22.9 12.7 405 Qatar (83) 16.9 9.5 195 Bahrain (n/a) 193 147 10.5 1.4 443 11.4 Oman (75) 1.0 2,

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Do banks still need branch networks?

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